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Extra, Extra: Catalogs in Newspapers

When you pick up your Sunday newspaper, don’t be so quick to discount the coupon fliers and sales circulars: There may be a real catalog tucked in there. Toys `R’ Us, for one, has been inserting its holiday catalog into the Sunday papers for about eight years. And recently, other marketers – including Ross-Simons and REI – have distributed catalogs via the Sunday papers.

While there are no numbers specific to the volume of catalog inserts in newspapers, the Newspaper Association of America (NAA) reports that the total circulation of full-run retail preprint inserts for U.S. Sunday newspapers in 1999 was 24.4 billion, up from 21.1 billion in 1995. But those inserts may be reaching a smaller audience these days; according to the NAA, Sunday newspaper readership among adults in the U.S. has dropped from nearly 69% in 1995 to 65% in 2000.

Outdoor sporting gear and apparel cataloger/retailer REI inserted a 12-page slim-jim in newspapers in October. “We ran it in major newspapers in key markets, such as The New York Times and The Seattle Times,” to promote the company’s winter retail sale, says Mike Foley, spokesman for the Sumner, WA-based marketer.

Foley describes the insert as a flier rather than a catalog. “We’ve always done newspaper advertising, and that’s what we consider our most recent Sunday insert book to be,” he says. “We put more emphasis on our winter sports promotion this year, and the insert was part of that.” Customers were able to order directly from the insert, however, and it graphically “connects with the look of REI’s catalog,” Foley adds.

Regardless of semantics, the insert boosted sales. “We did extremely well in November,” Foley says. “Our retail sales were up 35%, and our online and catalog sales were up nearly 40%.”

But quantifying exactly how much of a sales boost is a direct result of catalog inserts in newspapers can be a challenge. “We try to gauge whether our books have an impact on sales, but it’s difficult to measure,” says John Buleza, catalog director for Ross-Simons, a Cranston, RI-based cataloger/retailer of jewelry, tabletop items, and home decor. In November, Ross-Simons inserted an undisclosed number of its core book into Sunday papers, including The Boston Globe, The Washington Post, and The Chicago Tribune – papers in regions where it has stores.

Because call center service reps request source codes when taking orders, Ross-Simons can figure out how many telephone sales resulted from the newspaper-distributed catalogs. But Buleza says it is trickier to track the success of promotions in the company’s stores and on its Website, which do not request catalog source codes.

Special delivery for whom? Determining the effectiveness of the newspaper-inserted catalogs is not the only challenge of this distribution method. It’s also difficult for catalogers to know exactly whom they’re reaching when they insert catalogs in newspapers.

“We insert by zip code to areas where we have a retail presence. But those newspapers might be delivered to mail order shoppers or to non-mail order shoppers – there’s just no way know or track that information,” Buleza says.

Inserting catalogs into newpapers, then, may prove less effective as a catalog prospecting tool than as a retail or Website traffic driver. After all, one truism of direct marketing remains firm, says Stan Madyda, vice president of list brokerage for Danbury, CT-based list firm D-J Associates: “If you’re mailing to a proven catalog buyer, you will get a stronger response than if you’re mailing to unproven prospects,” such as zip-selected newspaper subscribers.

But, he adds, distributing catalogs via newspapers can still pay off. “Any test is money well spent,” he says, “because you might zero in on some areas that have a strong response.”

The inevitable cost factor None of the catalogs contacted by Catalog Age claim that the January U.S. Postal Service rate increase is encouraging them to distribute more catalogs via newspapers. Cost, however, is always a factor in marketing decisions – and the cost of newspaper inserts varies.

Newspaper Services of America, a Downers Grove, IL-based preprint media placement agency, negotiates rates with newspapers for different clients based on how many inserts the client is running and the size of the inserts. Newspaper Services spokesperson explains that if a company were to cold-call a newspaper, it might be quoted a certain rate, but based on the type and frequency of inserts, the rate could be discounted. In some cases, it might cost a company $45/M to insert a catalog in a newspaper, whereas it might cost up to $150/M to mail.

In the case of the Toys `R’ Us catalog, which Newspaper Services handled, postage cost was a factor in the company’s decision to distribute via newspapers. The last Toys `R’ Us book (Holiday 2000) weighed 4.86 ounces, “and the postage cost to mail out something that large is just outstanding,” the spokesperson says.

“Cost of insertion can, in some cases, be roughly half that of postage,” Buleza says, but he adds that the cost varies by the weight of the catalog, as well as by the newspaper and the region of distribution. “Major metro market papers, such as The Washington Post or The Chicago Tribune, might not be less expensive than postage,” he notes, whereas a smaller paper such as The Newark Star-Ledger might be.

Despite the challenges of sourcing orders, targeting prospects, and assessing costs, catalogers that have distributed books via newspapers say the benefits outweigh the downsides. Buleza, for one, describes the method as a cost-effective means to drive traffic to all of its channels.

REI’s Foley reiterates the multichannel theme. “We’re a multichannel company,” he says, “and we want to provide our customers with as many means to shop from us online, in stores, or by phone.” Reaching customers as they read the Sunday newspaper over coffee and a croissant is another method of reminding buyers of their options.